The Truth about no Fee Credit Cards

No-fee credit cards may be the best option for responsible users of credit. Sometimes a no-fee card will have a higher rate interest rate than one with a fee, however, if you are paying off your balance each month, the interest fee is not much of a concern. A person with good credit should be able to obtain a no-fee card with a competitive interest rate, which could come in handy if one encounters some unexpected financial difficulties.

Many of the credit cards that charge fees are ones that provide special benefits, such as airline miles or other travel privileges, which are based on the amount charged. Though these rewards might look good on paper, you have to consider whether you will get your money’s worth. Will you actually charge enough on the card to earn any rewards? Even if you manage to earn the benefits, will you be able to travel during times that aren’t restricted by black out periods? For many people, the benefits don’t justify the costs.

There are several no-fee credit cards that provide rewards to their customers. These benefits include airline miles, gift certificates for stores and restaurants, and probably the best reward, cold hard cash, often rewarded as a credit on the account statement. Since you should only charge items you can afford and pay your balance in full each month, these cash rewards are basically free money. Cash is not subject to black out or expiration dates, as are many other credit card rewards.

Another benefit frequently advertised by the fee charging credit cards is their extra travel insurance. If you don’t travel very often, this won’t be much of a consideration. Even if you do travel, it is very likely that your own auto insurance will cover you when you are driving a rental car. As for accidental death insurance, you may be better off putting that annual credit card fee toward life insurance that will provide for your family whether you die of accidental or natural causes. Besides, these same benefits are also provided by the better no-fee credit cards.

The only people who might struggle to obtain a no-fee credit card are those with damaged credit. The best option for people in this situation is to work hard to use their cards more responsibly and pay their balances down as quickly as possible. At the very least, they need to never skip a payment. After several months or a year of responsible behavior, the credit card holder may be able to convince his bank to drop the annual fee. If not, that person should check with another credit card issuer to see if he can obtain a no-fee credit card.

With so many banks and financial institutions fighting for business, it should not be hard for a person to obtain a no-fee credit card with a competitive interest rate and even some reward benefits. For the average credit card user, fee free is the way to be.